ECC backs SBMA plan to suspend imports of used vehicles

The Economic Coordinating Council (ECC) has approved the recommendation of Subic Bay Metropolitan Authority (SBMA) Chairman Felicito Payumo to suspend the importation of used vehicles and the release of such units from the Subic freeport, Finance Secretary Jose T. Pardo announced yesterday.

The recommendations to suspend the importation of used vehicles was prompted by complaints from the Philippine Automotive Federation, Inc. (PAFI).

At least three companies are currently engaged in the importation and auction of imported vehicles. These are JVMC, Subic Auctioneers International and Asia International Auctioneers.

The auctions in Subic had quietly earned a big following, emboldening the three firms to even make ad placements in local papers.

Participants to the auction are required to make a P100,000 deposit after which they can participate in an open bidding.

The winning bidder subsequently pays the bid price for the vehicle, plus about P5,000 for registration papers with the Land Transportation Office .

The three auction firms claim that all the auctioned vehicles are already tax-paid.

PAFI complained that the importation and auction of such vehicles have a negative impact on local car manufacturers and retailers.

The local automotive industry, PAFI claims, is placed at a disadvantage because it follows the set rules and pays the proper taxes.

The SBMA, however, earlier claimed that all the imported vehicles were paid the proper taxes and that the Bureau of Customs was able to generate between P40 million and P50 million from the said auction.

Under the original concept of the freeport, vehicles, heavy equipment and water motorcraft could be imported into the zone and used only within the area. If the vehicles are taken out of the freeport, these are taxed accordingly.

The imported vehicles sold in the auction, however, have been imported for sale directly in the auction and were never used in the freeport.